3. Practice Problem 14-5 State Federal Bani (SFB) offers two borrowing options to businesses: (1) a simple interest loan with an 8 percent interest rate and no compensating balance and (2) a discount interest loan with a quoted rate equal to 7 percent that requires a 20 percent compensating balance. If a firm needs a sixmonth loan, which option should it choose based on rim? Assume the firm normally maintains a negligible checking account baiance at the bank, Assume there are 360 days in a year. Do not round intermediate calculations. Round your answers to two decimal places. Option 1, nat? Option 2, riae: ey Based on rusile should be chosen